Benefits

Basics for Entrepreneurs Before the Obamacare Exchanges Open

Beginning next week, Americans can begin shopping for health insurance on online marketplaces set up under the Affordable Care Act. States have been publishing prices for insurance plans available on their exchanges for months, but the cost of plans sold on marketplaces operated by the federal government was unclear until today, when the U.S. Department of Health and Human Services detailed pricing in a new report.

What should small business owners and the self-employed know before the exchanges open on Oct. 1?

Consumers in Wyoming will pay the highest rates—$425 a month—for the cheapest plan in the bronze level of coverage (other levels include silver, gold, and catastrophic). Minnesotans will pay as little as $144 a month for bronze-level plans. About 95 percent of eligible, uninsured Americans live in states where costs will be less than the Congressional Budget Office estimated last year, HHS says.

For most small business owners, there’s not a whole to do before the exchanges open next week. That’s because the Obama administration delayed a provision requiring businesses with at least 50 workers to provide insurance to employees until 2015.

Small business owners may want to look into another type of health insurance marketplace, called Small Business Health Option Programs. Twenty-four states plus the District of Columbia will open SHOPs on Oct. 1, allowing small business owners in those states to compare prices and enroll for employee insurance for 2014. Employers aren’t required to use SHOPs to buy insurance, but they may get tax credits and other benefits by doing so. Joanne Peters, a spokeswoman for HHS, says that the agency won’t have pricing information for SHOPs until they open next week.

As Karen E. Klein pointed out earlier this month, small business owners are still required to give workers written notification that the exchanges are opening. (The U.S. Department of Labor has provided model notices for employers who offer insurance (pdf) and for those who do not offer insurance (pdf).)

For the self-employed, comparison shopping is possible now. The report published by HHS today provides prices for the lowest-cost plans in each of the four categories. There’s also this nifty tool from Bloomberg News, which gives the price of the cheapest bronze and silver plans in 47 states, plus the District of Columbia. (Massachusetts, Hawaii, and Kentucky are excluded.)

That’s not enough to paint the full picture—costs will vary depending on tax credits determined by income, for instance—but it’s enough for independent workers to get a sense of how plans available on health exchanges will compare with their previous coverage.